Government admits Brexit of any kind will make UK poorer

The UK will be poorer economically under any form of Brexit, compared with staying in the EU, the government has said.

By The Newsroom
Wednesday, 28 November, 2018, 12:19

Official Treasury analysis suggests the UK economy could be up to 3.9% smaller after 15 years under Theresa May's Brexit plan, compared with staying in the EU.

But a no-deal Brexit could deliver a 9.3% hit, the new estimates say.

The Treasury has admitted any kind of Brexit deal will leave the UK poorer.

Chancellor Philip Hammond said the deal was not just about the economy, but would deliver "political benefits" too.

The Treasury estimates do not put a cash figure on the potential impact on the economy, but independent experts have said that 3.9% of GDP would equate to around £100bn a year by the 2030s.

The 83-page document does not attempt precisely to forecast the impact of Mrs May's deal.

But it compares the likely impact of the proposals agreed by the Cabinet at Chequers in July and set out in the government's White Paper with the alternative scenarios of Norway-style membership of the European Economic Area, a Canada-style free trade agreement with the EU and a no-deal Brexit.

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It finds that GDP will be lower in 15 years under all Brexit scenarios than it would be with EU membership. And in all cases, national income will be reduced if migration from Europe is reduced from its current levels.

Mr Hammond said the planned Brexit deal combined most of the economic benefits of remaining in the EU with the political benefits of leaving the EU.

Asked if the UK would be poorer under Mrs May's deal, the chancellor said: "The economy will be slightly smaller in the prime minister's preferred version of the future partnership."

But he argued that staying in the EU was not politically "viable".

MPs are due to vote on Mrs May's Brexit deal, which she insists is the only option, on 11 December.